A system and method for evaluating an offer which has been made in relation to certain delinquent accounts is disclosed. A historical database of sorts is maintained on accounts which were previously characterized as delinquent. Payment history information is also retained on each of these historical delinquent accounts. These historical delinquent accounts are scored, and thereafter placed into a plurality of groups, with the high and low scores of these groups defining an associated score cluster or range of scores. A liquidation profile is established for each portion of the historical delinquent accounts defined by the application of the noted score clusters thereto (i.e., each collection of delinquent accounts defined by a particular score cluster has its own liquidation profile). Liquidation profiles are representative of how historical delinquent accounts defined by a particular score cluster recovered over time (i.e., representative of the payment stream of each historical delinquent account defined by a particular score cluster). When an offer is made in relation to accounts which are currently delinquent (not a historical delinquent account), each of these current delinquent accounts is scored and then separated into a plurality of groups using the score clusters which were identified when defining the plurality of groups of the historical portfolio. The net present value of each portion of the current portfolio defined by the application of the score clusters thereto is determined using the liquidation profile of its corresponding group of historical delinquent accounts (i.e., those defined by the same score cluster), using the outstanding balance information on each of these current delinquent accounts within the subject score cluster, and making normal assumptions regarding net present value determinations. This net present value may then be compared with an outstanding offer on a group-by-group basis.
Legal claims defining the scope of protection, as filed with the USPTO.
1. A method for managing a current portfolio comprising a plurality of current delinquent charge accounts, comprising: determining a score for each of the plurality of current delinquent charge accounts in the current portfolio; defining a plurality of score clusters for the current portfolio, wherein each score cluster comprises a range of scores; segmenting the plurality of current delinquent charge accounts of the current portfolio into the defined plurality of score clusters according to the determined score; retrieving a liquidation profile established for each of the clusters of current delinquent charge accounts; determining a net present value for each cluster of current delinquent charge accounts using the retrieved liquidation profile; and dispositioning each cluster of current delinquent charge accounts according to the determined net present value.
2. The method according to claim 1 , wherein the determining of a score comprises using at least two probability factors.
3. The method according to claim 1 , wherein the determining of a score comprises using a product of a logistic regression and a multiple linear regression.
4. The method according to claim 1 , wherein the determining of a score is based upon at least one of an amount of time that a current delinquent charge account has been characterized as being delinquent, the length of time that a current delinquent charge account has been in existence including a time period wherein the account is characterized as non-delinquent, an amount owed to a current delinquent charge account, residence of an account holder of the current delinquent charge account, a creditor associated with the current delinquent charge account and a category in which the current delinquent charge account may be placed.
5. The method according to claim 1 , wherein the retrieving of a liquidation profile comprises: retaining a historical portfolio comprising a plurality of historical delinquent charge accounts and a payment record for each of the historical delinquent charge accounts; determining a historical score for each of the plurality of historical delinquent charge accounts in the historical portfolio; defining a plurality of historical score clusters for the historical portfolio, wherein each historical score cluster comprises a range of scores corresponding to the score clusters defined for the current portfolio; segmenting the plurality of historical delinquent charge accounts of the historical portfolio into the defined plurality of score clusters; and establishing the liquidation profile for the historical delinquent charge accounts in each score cluster.
6. The method according to claim 1 , wherein the dispositioning of a cluster of current delinquent charge accounts comprises comparing the net present value determined for the cluster with a bid price received for the current portfolio.
7. The method according to claim 1 , wherein the dispositioning of a cluster of current delinquent charge accounts comprises at least one of selling the current delinquent charge accounts within the cluster, sending the current delinquent charge accounts within the cluster to a collection agency affiliated with a creditor of the current portfolio, and sending the current delinquent charge accounts within the cluster to an internal collection agency affiliated with the creditor.
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December 23, 1999
September 24, 2002
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